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Pilatus creditors being paid via Central Bank - Jason Azzopardi

David Casa asks ECB to investigate

Updated at 8.30pm: adds CBM's statement

The creditors of Pilatus Bank are being paid their dues by the Central Bank of Malta, according to information given in parliament on Wednesday.

MP Jason Azzopardi said that this has been happening since the afternoon of Maundy Thursday, and that the payments were being made by the Central Bank of Malta by online direct credit.

"In April alone more than €129,000 were paid by the CBM to these creditors. Why is it only Sandro Demarco, the scarlet red Deputy Governor, who is dealing with this? Why all the secrecy? Why did OPM exert pressure? Why did the CBM not issue any public announcement? If this is normal good governance, why hasn’t the CBM gone public about it?" Dr Azzopardi later wrote on Facebook.

Finance Minister Edward Scicluna replied that he was not aware of the payments and that it was possible that they had been authorised by the person put in charge of the bank, which has since had its licence suspended.

Watch: Pilatus Bank administrator silent on bank closure

The MFSA had tasked the regulator, Lawrence Connell, with control of Pilatus’s banking and investment business in March after chairman Ali Sadr Hasheminejad was arrested on charges of money laundering and violating US sanctions.

It was not clear from the exchange in parliament whether the creditors were corporate clients of the bank, or depositors whose funds had been released.

David Casa asks ECB to investigate

In a statement later, Nationalist MEP David Casa said he sent a letter to the chairwoman of the European Central Bank's supervisory board to make her aware of the latest revelations.

He also asked the ECB to:

* establish whether such funds originated from Pilatus Bank’s personal accounts or were funded by the Maltese taxpayer, and if it was the latter, investigate how Pilatus Bank planned to reimburse such funds;

* assess whether such transfers were necessary to safeguard the stability of the banking system in accordance with EU rules;

* investigate whether MFSA authorisation was necessary for these transfers to take place and whether it was given;

* monitor thoroughly all transactions effected by the CBM on behalf of Pilatus Bank.

MEP Casa said that the latest revelations could have serious implications and the fact that such transfers had been kept secret for the past weeks spoke volumes.

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Central Bank's reply

In a statement, the Central Bank said that, in line with its basic function of acting as banker to the banks, all credit institutions licensed by the MFSA, including Pilatus, were obliged at law to operate a reserve deposit account with the CBM.

Following the appointment on March 22 by the Malta Financial Services Authority of a competent person to take charge of the bank's assets, and following consultation with the MFSA, each transaction undertaken by Pilatus through its account at CBM was conducted with the explicit approval of the 'competent person'.

This, CBM said, was in line with the administrative measures implemented by the MFSA, and therefore, there was no new measure taken by the CBM that needed to be communicated to the public.

Such transactions by Pilatus, like all transactions by all licensed credit institutions, were effected by the staff of the CBM’s Payments and Banking Department.

It categorically denied that the Office of the Prime Minister exerted any kind of pressure on CBM on any matter.

Attached files

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